Stablecoin Development Corporation (SDEV) Q2 2024 earnings summary

Executive summary

• Eye care business achieved another quarter of growth, with Avenova-branded products driving sales through OTC online channels.

• Eye care product sales for the first half of 2024 reached $4.8 million, supporting a full-year goal of $10 million.

• Net loss of $1.6M for Q2 2024, improved from $4.0M in Q2 2023; six-month net loss was $5.2M, down from $5.8M year-over-year.

• DERMAdoctor subsidiary was divested in March 2024 for $1.1M, incurring a $0.9M expense and streamlining operations.

• Subscription sales accounted for 24% of all online Avenova revenue in the first half of 2024, providing predictable recurring revenue.

Financial highlights

• Q2 2024 net sales were $2.4 million, with nearly all revenue from eye care products, up 8% year-over-year; total product revenue fell 32% due to lower wound care sales.

• Gross margin for Q2 2024 was 66%, up from 49% in Q2 2023, due to higher-margin product mix.

• Net loss attributable to common stockholders for Q2 2024 was $1.6 million ($1.37/share), improved from $4 million ($44.43/share) in Q2 2023.

• Six-month 2024 net sales were $5 million, compared to $5.9 million in 2023; eye care sales rose to $4.8 million from $4.4 million.

• Cash and cash equivalents were $0.8 million as of June 30, 2024, down from $2.9 million at year-end 2023.

Outlook and guidance

• Confident in reaching $10 million in eye care product sales for 2024, with incremental increases expected in Q3 and a strong Q4.

• Company expects 2024 expenses to exceed revenues and anticipates continued operating losses and negative cash flows until revenue growth supports operations.

• Wound care orders expected to continue but at lower levels than 2023.

• Management is evaluating capital-raising strategies, cost reductions, and potential strategic transactions to address liquidity needs.

• Strategic partnerships and potential fundamental transactions are a main focus for the remainder of the year.